Playing down its unsuccessful bid to establish diplomatic ties with Bhutan, China today said it is glad to see New Delhi and Thimphu develop their relations further during the just-concluded visit of Prime Minister Narendra Modi.

"With regard to China's relations with Bhutan, we have not established diplomatic relations but our two countries maintain friendly exchanges and visits," Chinese Foreign Ministry spokesperson, Hua Chunying told a media briefing here today answering a question on Modi's visit to Thimphu.

"We respect the independence, sovereignty and territorial integrity of Bhutan and we are willing to further develop good neighbourly relations with Bhutan based on the five principles of peaceful coexistence," she said.

Strategically placed between India and Tibet, Bhutan has remained aloof since 1951 after China took firm control of Tibet, which borders with Bhutan.

Relations between Beijing and Thimphu remained traditionally strained following a border dispute.

However in a surprise move in 2012, the then Chinese Premier Wen Jiabao and his Bhutanese counterpart, Jigmi Y Thinley met on the sidelines of the UN Conference on Sustainable Development at Rio De Janeiro.

During the meeting, the two leaders expressed their willingness to establish diplomatic relations and discussed measures to speed up efforts to resolve the border dispute and to step up bilateral ties.

But Bhutan did not pursue the move apparently to avoid creating any misunderstanding in its ties with India.

China and Bhutan however continue their exchanges with visits by high level diplomats besides a dialogue to resolve the border dispute.

On Modi's visit to Thimphu which was his first foreign visit after taking over as Prime Minister, Hua said, "We are paying attention to the Indian prime minister's visit. We are glad to see our neighbours develop friendly ties with each other".